Vallejo and its ex-downtown developer Triad to face off in court late 2013

FAIRFIELD -- Barring a breakthrough at a mediation session, the city of Vallejo and its former downtown developer are headed to court next fall.

Lawyers for the city and its fired downtown developer Triad Downtown Vallejo, LLC, met in Solano County Superior Court on Wednesday after Judge Michael Mattice denied the city's dismissal based on legal issues. A jury trial date was set for Sept. 10.

At issue is the long-floundering plan to redevelop downtown Vallejo.

Triad agreed in 2005 to help revitalize the area with retail and residential units on seven parcels in 12 square blocks bordered by Sonoma Boulevard and Capitol, Santa Clara and Maine streets.

The agreement gave Triad the exclusive right to develop downtown and prevents the city from even talking to another developer about the area.

Triad officials say the firm has too much invested to walk away and is committed to improving downtown. They say they've invested more than $10 million already, including the elaborate renovation of Virginia Street's Empress Theatre.

Last year, Triad sued the now defunct Vallejo Redevelopment District, whose functions the city took over, for breach of contract, after the city fired the firm for not redeveloping the downtown as promised.

The city severed its agreement with the company in March 2009, after four years of working together.

Triad attorney Robert Stumpf, Jr. argued that a clause in the firm's contract with the city relieved it of its obligations if something happened beyond its control to prevent the project going forward. Company officials say the real estate market collapse and subsequent recession fit the definition of such a circumstance.

The city's lawyer Leah Castella of Oakland-based Burke, Williams & Sorensen, LLP, countered that Triad's failure to secure funding for its project predated the recession by two years. She said that case law suggests that there's a time limit of about a month between an event occurring, and a when a failure to perform a contracted function can be blamed on it.

Castella further argued that an economic downturn doesn't qualify as a circumstance beyond the firm's control, because, like in any other purchase, securing funding is a risk the firm knows it's taking when it enters into a contract.

"Triad is trying to force the city to remain in a contract with it indefinitely ... though they will never be able to build the project they promised," Castella said.

Stumpf said his clients disagree with the city. He said one is not in default until a notice of default as been received. He said he has answers to all the city's arguments but believes these are matters that must be decided at trial.

Mattice agreed, and set aside 10 days for a jury trial in his courtroom, which by then will have moved to the courthouse in Vallejo. The move is schedule for December.

Contact staff writer Rachel Raskin-Zrihen at (707) 553-6824 or rzrihen@timesheraldonline.com. Follow her on Twitter at RachelVTH.